First-time sellers: Here’s why your bank needs 90 days’ notice
First-time home sellers have as many questions as first-time buyers: Who pays for the various clearance certificates? What is my estate agent doing behind the scenes? How should I structure the process of selling my home with buying or renting a new one? We at HomeTimes have focused a lot of attention on educating and guiding first-time buyers, but realise that for every virgin buyer, there is a first-time seller too. In a series of articles, we will cover topics that address the concerns and questions of first-time sellers.
Why do I need to give my bank 90 days’ notice if I want to sell my home or cancel my bond?
“Nedbank clients are required to give 90 days’ notice if they intend to cancel the bond or sell their home. By not providing 90 days’ notice, the client will be liable for an early termination fee up to a maximum of three months’ interest. Should the bond be cancelled before 90 days, a pro-rata interest amount will be charged. If the home loan is paid up (zero outstanding balance), no fee is charged.” – Tim Akinnusi, head of Home Loans Sales and Customer Management at Nedbank
“The reason why we need this period of time is because section 125 of the National Credit Act entitles the bank to charge an early termination fee of three months interest on the outstanding balance, or the difference between the notice period given and three months. If the customer provides the bank with a 90-day notice we do not charge the early termination fee.
“The bank will send cancellation figures to the cancellation attorney once it receives notice that a client has sold his property. The time taken to cancel the bond is determined by a number of factors; some of the more significant events of which are:
#1 There may be up to three conveyancing attorneys involved in a sale transaction as there is usually more than one sale transaction. In each of the three transactions the sellers and buyers may be assuming the roles of buyer and seller and it is often the case that three transactions will need to be registered simultaneously. This requires some logistics.
#2 The purchasers to the transactions may experience delays in obtaining mortgage finance and the buyers and sellers may not be readily available to sign conveyancing documents.
#3 Delays may also be experienced in obtaining rates clearance certificates from the local municipalities which is a requirement prior to the cancellation of any bonds.
#4 In the event that there are interdicts against any of the properties where a creditor may have instituted legal action, delays may be experienced in the upliftment of these interdicts.” – Calvin Ndlovu, head of operations at FNB Home Loans
“If the customer settles the mortgage loan and requests that the bank cancel its mortgage over the property and returns the original title deeds to the customer, an attorney needs to assist with the process. There is a fee payable by the customer to the attorney directly, and this process is fairly shorter as it only requires the lodgement of cancellation at the deeds office.” – Andrew van der Hoven, head of Home Loans at Standard Bank
“If the customer has excess funds available in their Flexi Reserve or home loan account these funds remain available throughout the cancellation notice period. The Flexi Reserve amount only becomes unavailable when the transferring attorneys request cancellation figures to make final calculations. Once the account is settled, any remaining fees or additional funds are detailed in a statement and returned to the customer.” – Nondumiso Ncapai, head of business development, Absa Home Loans
First-time seller? Email your question to firstname.lastname@example.org and we’ll be sure to get back to you